Many of you might have heard the term Letter of Indemnity (LOI) in day to day shipping practice..
There have been several arguments, discussions, commercial threats, litigation etc surrounding this LOI..
But many still have doubts on what an LOI is, when it can and should be used, whether it is legally enforceable and whether it is worth the paper it is written on..
I will try to answer these questions in this article..
Last year, I asked a question “Electronic bill of lading – are you and your country ready for it..??”..
This question could not be more relevant TODAY, considering the current circumstances, and the impact COVID-19 on the shipping and freight industry..
An electronic paperless bill of lading is a bill of lading issued electronically instead of being printed on paper and issued physically to the customer as a hard copy..
Whether using an electronic paperless bill of lading issued on the back of a Blockchain based platform or a Bolero based platform, these electronic bill of lading options are said to fulfill the functions in the same manner as a traditional paper bill of lading..
Many believe that the electronic bill of lading will be a game changer in the shipping industry with faster, efficient transactions, reduction in costs with greater security and less risk..
However, there were concerns on the issue of safety, security and acceptability relating to the transmission and receipt of electronic paperless bill of lading and in several cases it was required to check whether the carrier and country were ready for electronic paperless bill of lading..
Currently, we are in a unique moment in history where as per reports, COVID-19 has affected all countries around the world.. And this my friends is a time when almost all shipping lines and customers would be wishing that they had access to Electronic Paperless Bills of Lading..
Question from a reader..
Greetings Hariesh. I was just wondering, in a case whereby a plane say crashes or disappears, and having some OBLs being couriered, who would be responsible for doing the Letter of Indemnity to facilitate release of cargo?
Question from Lloyd BaMumu Taadira
If you are in the shipping and freight industry, you would have no doubt heard about a Delivery Order..
This article explains in detail all about a Delivery Order – what is it, who issues it, who should it be issued to and its importance..
An exporter wants to get an Express Release done while the Original Bill of Lading is with the bank..
Is this possible..?? Read this article to find out..
This is the Story of a CIF contract and a Letter of Indemnity..
Seller is delivering CIF to Chinese port. The contract has an LOI provision if the original bill of lading should be lost..
The buyer’s bank refuses to make payment without original BOL and will not accept LOI..
What happens next..??
A reader of this blog had asked a question as below : What is the limitation on 3 OBLs? Why 3….I’ve had customers request 5+ OBLs to be issued. When … Read more here..
My Original bill of lading is lost………..!!!!!! A chilling sentence that creates panic in the hearts of many of the people involved in any international trade transaction involving an Original … Read more here..